Climate technology startups are raising more money and raising it faster than at any time over the past decade, according to Emily Reichert, CEO of startup incubator Greentown Labs.
“It is a pretty darn good place to be,” Reichert said. “For the first time in my experience, money is just flowing into this field in a way that is unexpected.”
Alicia Barton, Greentown board member and CEO of FirstLight Power, spoke with Reichert about her work with climate tech startups during the New England Women in Energy and the Environment’s annual meeting and Fall Fête event on Wednesday.
“The tide has turned, and it’s amazing,” Reichert said.
The startup community has many job opportunities right now, as the small teams that start new companies are building up their workforce experience.
Startups have a reputation for low job security, but Reichert says that’s not the current reality.
“There are so many roles that are out there in these startups, and they are better funded than I have ever seen,” she said.
The value to startups of the Biden administration’s stance on climate change cannot be underestimated, Reichert said.
“It affects talent, capital and all of the things that startups are going to need in order to be successful or even get started,” she said.
Federal funding for climate-related issues also is helping.
“There are opportunities for innovation funding from the very earliest stages for companies all the way up to the loan program at [the U.S. Department of Energy] ... that can help the scale and commercialization happen that is needed for early-stage technology to have a climate impact,” Reichert said.
While funding may be flowing, it’s still not a level playing field.
“Raising funds is challenging for everyone, but it’s particularly challenging for women,” she said.
While the investment community is not diverse, Reichert believes it has changed somewhat in the last few years, as firms feel the pressure to bring a variety of voices to decision making.
Despite that challenge, she said, female entrepreneurs can be successful by building a solid support network.
Reichert has been with Greentown since its origins in a basement in Boston, and she has watched it grow to support 450 startups. It has a 100,000-square-foot campus in Sommerville, Mass., and it recently opened a smaller campus in Houston.
The organization started out with environmentally focused entrepreneurs and has since made climate its “North Star,” Reichert said.
“We’re laser focused on supporting startups that are working on decarbonizing our economy across sectors, whether it be electricity, buildings, transportation, agriculture or manufacturing,” she said. “Our process for bringing them in the door looks at the greenhouse gas emissions or the resiliency benefits that the technology provides.”
Since its launch 10 years ago, Greentown’s startups have raised $1.5 billion in capital, and they have an 88% success rate, Reichert said. The Houston campus, she said, already has 40 startups.
The decision to expand Greentown to Houston was not an obvious one, Reichert said.
“We’ve been trying to solve climate change from the coast for years and years, and we still aren’t there,” she said. “If you can transition the folks in Houston and involve people in the solution to the problem of climate change ... that means you have people marching with you instead of against you.”
Business leaders in Houston are recognizing that climate tech is a valuable strategy for success in the future.
Civic and business leaders in Houston “are saying that they know they need to be part of the energy transition ... because the fact of the matter is that the oil and gas industry is not going to be driving Houston’s economy for more than the next 10, maybe 20, years,” Reichert said.